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Discounted Cash Flow Model & Analysis Problem Text For a new product, the initial cost to launch the product ( e . g . ,
Discounted Cash Flow Model & Analysis Problem Text For a new product, the initial cost to launch the product eg product development, equipment and tooling, market testing, etc. is estimated to be $ Sales volume in the first year is estimated to be units and is projected to grow at a rate of per year. The year selling price is $ and will increase by $ each year. Year unit variable costs are $ and fixed costs are $ Unit costs are expected to increase per year. Fixed costs are expected to increase per year. Develop a spreadsheet model to predict the net present value of profit based on a four year time horizon, assuming a discount rate. Treat the product launch cost as occurring at time and the annual inflows and outflows to be at the ends of the respective years. Instructions & Guidelines Base Case. Develop a correct, flexible, and documented model for the problem. Hint: The NPV for the base case model should be $ Most of your time will should be used on this step. Note that there are separate inputs values to this problem. After the base case is completed, you should be able to change any of the input values and have the NPV recomputed correctly group the inputs together so the user can clearly see what can be changed You can assume this is always a year project; you dont need to make it flexible with respect to the time horizon of the project. Text Box. On your worksheet, create a textbox add to this same text box in the following steps and record the NPV With the inputs at the base case values, should the company pursue the project? Critical Values Breakeven Find breakeven points ie where NPV $ with respect to the year sales quantity, the year selling price, and the unit variable cost growth rate. For each, start with all the inputs at their base case values. Record these values in the text box. Critical Values With all the other inputs at their base case values, find the discount rate that results in NPV $ What name is used for this special discount rate? Record the value and the name in the text box. Way Data Table. Create a way data table tracking NPV by changing the discount rate. Vary the discount rate from to in increments of Create a line chart based on the result. Make the Data Table flexible so the user can change the starting and increment values for the discount rate. Way Data Table. Create a way Data Table tracking NPV by changing Sales Volume Growth Rate in a column from to in increments of and changing year Fixed Cost in a row from $ to $ in increments of $ Use conditional formatting on the results so the user can easily see how NPV changes based on these two variables. Could anyone buld this in an excel and share? I willm be greatful.
Discounted Cash Flow Model & Analysis
Problem Text
For a new product, the initial cost to launch the product eg product development, equipment and tooling, market testing, etc. is estimated to be $ Sales volume in the first year is estimated to be units and is projected to grow at a rate of per year. The year selling price is $ and will increase by $ each year. Year unit variable costs are $ and fixed costs are $ Unit costs are expected to increase per year. Fixed costs are expected to increase per year. Develop a spreadsheet model to predict the net present value of profit based on a four year time horizon, assuming a discount rate. Treat the product launch cost as occurring at time and the annual inflows and outflows to be at the ends of the respective years.
Instructions & Guidelines
Base Case. Develop a correct, flexible, and documented model for the problem. Hint: The NPV for the base case model should be $ Most of your time will should be used on this step. Note that there are separate inputs values to this problem. After the base case is completed, you should be able to change any of the input values and have the NPV recomputed correctly group the inputs together so the user can clearly see what can be changed You can assume this is always a year project; you dont need to make it flexible with respect to the time horizon of the project.
Text Box. On your worksheet, create a textbox add to this same text box in the following steps and record the NPV With the inputs at the base case values, should the company pursue the project?
Critical Values Breakeven Find breakeven points ie where NPV $ with respect to the year sales quantity, the year selling price, and the unit variable cost growth rate. For each, start with all the inputs at their base case values. Record these values in the text box.
Critical Values With all the other inputs at their base case values, find the discount rate that results in NPV $ What name is used for this special discount rate? Record the value and the name in the text box.
Way Data Table. Create a way data table tracking NPV by changing the discount rate. Vary the discount rate from to in increments of Create a line chart based on the result. Make the Data Table flexible so the user can change the starting and increment values for the discount rate.
Way Data Table. Create a way Data Table tracking NPV by changing Sales Volume Growth Rate in a column from to in increments of and changing year Fixed Cost in a row from $ to $ in increments of $ Use conditional formatting on the results so the user can easily see how NPV changes based on these two variables.
Could anyone buld this in an excel and share? I willm be greatful.
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